Rimco, Caterpillar’s dealer for Puerto Rico and the eastern Caribbean, won approval to set up shop in Cuba’s Mariel Special Economic Development Zone (ZED Mariel) on Wednesday.
The announcement makes Rimco the first U.S. company to get the green light to operate in ZED Mariel – an industrial area 45 miles to the west of Havana that is attempting to attract investment by waiving some taxes and offering long-term operation contracts. ZED Mariel sits next to a recently renovated deep-water port and container terminal, giving it a logistically strategic location.
“This morning we received the news that Rimco was formally approved to become a user of the zone, which means we are able to establish our business in Mariel,” Rimco Executive Vice President Caroline McConnie said at Cuba’s annual trade fair. “We were expecting it happen next month, but I think the timing is great with us being at the fair.”
Rimco hopes to open a dealer facility that sells and rents Caterpillar equipment as early as next year. The company will also sell parts and repair equipment. McConnie said the plan is to operate in a temporary facility until a permanent space is built. “We want to start marketing our products as soon as possible,” she said.
While Rimco is the first U.S. company to earn ZED Mariel approval, it won’t be the only equipment dealer in the zone. Womy Equipment Rental of the Netherlands recently started operating a facility in the zone.
“It’s good to have competition,” McConnie said. “Our value proposition is to have the full Caterpillar dealer model in Cuba, and the advantage of that is product support and giving customers access to parts and service right here in Cuba.”
Rimco’s path to Mariel was established during the Obama-era Cuba opening, but it continued while President Donald Trump chipped away at parts of the rapprochement. In February 2016, Caterpillar designated Rimco as its official dealer for Cuba. The company started the ZED Mariel application process earlier this year. It involves completing a feasibility study and consulting legal entities. To make the application process easier for prospective users, ZED Mariel recently introduced a “one-stop shop” that allows companies to complete paperwork from various ministries through a single office.
“The process is long, but it was always very clear what stage we were in, and the next steps,” McConnie said. “I have no complaints. They were very helpful.”
Rimco’s ZED Mariel approval was announced about one year after Cleber, an Alabama-based farm vehicle manufacturer promoted by former President Barack Obama, failed in its effort to obtain permission for constructing a factory in the zone. ZED Mariel authorities say Cleber was rejected because the technology it intended to use was outdated.
“It is definitely related to the technology,” Mariel Director Ana Teresa Igarza told Cuba Trade in February.
Rimco’s ZED Mariel approval comes in the wake of a U.S.-Cuba diplomatic fall out sparked by a series of unexplained incidents that left U.S. and Canadian government workers in Havana with symptoms such as hearing loss, headaches and nausea. The State Department responded to those “attacks” by withdrawing most of its Havana Embassy staff, expelling 15 officials from the Cuban Embassy in Washington, and issuing a travel warning for the island.
Bilateral relations are also deteriorating over Trump’s stance on travel and trade with Cuba. On June 16, Trump signed a policy directive to make it harder for U.S. travelers to visit Cuba without an itinerary of activities, as well as bar U.S. companies from engaging entities linked to the Cuban military. The policy has not yet taken effect.
It’s not clear what impact the Trump policy will have on Rimco, as ZED Mariel is controlled by the military-owned Almacenes Universales SA. White House officials said in June that they don’t intend to disrupt U.S. businesses that established a presence in Cuba before new regulations take effect.